Havells India Ltd — Long-Term Investment Analysis
1. Company Overview
Havells India Ltd is a leading Indian electrical equipment company engaged in manufacturing a diverse range of products including cables, switchgears, lighting & fixtures, electrical consumer durables, and consumer electronics through its brand Lloyd. Founded in 1958, the company has grown from a regional electrical goods maker to a global player with strong domestic dominance.
Its product portfolio covers B2B industrial segments (cables, switchgear) and B2C consumer segments (fans, appliances, air-conditioners, lighting), making it one of the most diversified electrical players in India.
Fairvalue: Havells:
2. Industry & Growth Prospects
Industry Drivers
Urbanization & Housing Growth: Rising real estate activity and government push for affordable housing.
Smart Cities & Infrastructure: Demand for smart lighting, energy-efficient appliances, and advanced electrical systems.
Electrification of Rural India: Government schemes to expand electricity access.
Consumer Electronics Growth: Increasing penetration of ACs, refrigerators, and small appliances.
Shift to Energy Efficiency: Growth in LED lighting, inverter technology, and energy-saving appliances.
Growth Outlook
The Indian electrical and consumer durable industry is expected to grow 8–12% CAGR over the next decade, supported by rising per capita incomes, lifestyle upgrades, and infrastructure expansion. Havells, with its strong distribution network, brand equity, and multi-category presence, is well-positioned to capture this growth.
3. Historical Financial Performance
Sales & Profit Growth (FY1995 – FY2025)
Key Takeaways:
Long-term consistent double-digit growth in both sales and profits.
Margins have trended lower in recent years due to competitive pressure, higher input costs, and Lloyd’s integration drag.
Strong brand and channel presence have helped maintain resilience during slowdowns.
4. FY25 & Q1 FY26 Performance
FY25 (Full Year)
Sales: ₹21,778 Cr (+17% YoY)
Profit: ₹1,470 Cr (+16% YoY)
Margin: 6.7%
Q1 FY26 (YoY Decline)
Observations:
Weakness primarily from Lloyd Consumer (-34%) and Electrical Consumer Durables (-14%) due to softer consumer demand and seasonal factors.
Cable (+27%) and Switchgear (+9%) segments posted healthy growth, benefiting from infrastructure demand.
5. Segmental Revenue Q1 FY26
6. Peer Comparison (FY25)
Insight: Havells trades at premium valuations vs. peers due to brand leadership, diversified portfolio, and higher growth visibility.
7. Valuation History
Long-term PE Range: 16× to 90× (current at upper end, indicating premium pricing).
Long-term PBV Range: 5× to 16× (current near historical high).
Fair PE Estimate for FY26: ~50–60× given growth moderation.
8. Estimates & Price Projections
9. Portfolio Weightage Suggestion
Given current valuations, growth outlook, and risk-reward balance, Havells may merit ~0.25% actual portfolio weightage considering current growth and valuations out of 0.50%. in a diversified long-term portfolio, with potential to add during corrections toward fair value.
10. Long-Term Risk & Reward
Positives:
Strong brand recall & distribution.
Diversified product portfolio (reduces cyclical risk).
Consistent long-term compounding history.
Well-placed to benefit from India’s infrastructure and housing push.
Risks:
Demand sensitivity in consumer electronics (seasonal, weather-linked).
Valuations at upper end — limited near-term upside if earnings disappoint.
Competition from both organized & unorganized players.
Conclusion
Havells is a long-term compounding story in India’s electrical and consumer durable space. While current valuations are premium, long-term investors can consider gradual accumulation during corrections, aligning with a 5–10 year horizon for compounding returns in line with India’s infrastructure and consumption growth.
Disclosure: This analysis is for educational purposes only. It is not a buy/sell recommendation. Investors should do their own due diligence before making investment decisions.
